Is it bc the howey test says the efforts of a third party?
Dumb NFT question. Current model looks like this: % of every secondary sale goes back as payment to NFT creator. If $ goes to creator, its not a security. If $ goes to asset holder, it IS a security. Why does owner matter when considering whether an NFT breaks securities laws?
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Potentially, but still puzzling to me. Is “efforts of a third party” the people trading in the secondary market? Or the creator? Imo all NFTs are probs securities with that view
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1 - I think you are right this will show up in an enforcement action soon. 2 - I think "reasonable expectation of profit from the efforts of others" is what makes it okay for % of profit to flow to creator, creator did not market work as asset
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Dumber question: how is a NON FUNGIBLE ANYTHING a security. By definition, they represent a discrete thing, not dependent on any future endeavors or common enterprise. Put another way, aren’t all securities FUNGIBLE?
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yes, I think a defining trait of a security is that it is "fungible." that doesn't mean that non-fungible things don't have value and shouldn't be traded though. of course they do. that Babe Ruth signed baseball is pretty nice. but it's not a "Security"
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Does that make it the modern day bearer bond?
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“The term "security" means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of **interest or participation in any profit-sharing agreement**” https://www.fdic.gov/regulations/laws/rules/8000-6200.html …
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It’s fine to profit for yourself, but if you sell something that promises a share of the profits, then that falls under the definition of a security.
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